MBA 2nd Sem Operation Management

Notes
Introduction
Operations management (OM) is the administration of business practices to
create the highest level of efficiency possible within an organization. It is
concerned with converting materials and labor into goods and services as
efficiently as possible to maximize the profit of an organization.

Operations management teams attempt to balance costs with revenue to

achieve the highest net operating profit possible.

According to Slack-‘’ Operation Management is the set of activities that

create goods and service through the transformation of inputs and outputs.”

“KEY TAKEAWAYS

 Operations management (OM) is the administration of business

practices to create the highest level of efficiency possible within an
organization.
 Operations management is concerned with converting materials and
labor into goods and services as efficiently as possible.
 Corporate operations management professionals try to balance costs
with revenue to maximize net operating profit.”

Understanding Operations Management (OM)

Operations management involves utilizing resources from staff, materials,
equipment, and technology. Operations managers acquire, develop, and
deliver goods to clients based on client needs and the abilities of the
company.

Operations management handles various strategic issues, including

determining the size of manufacturing plants and project management
methods and implementing the structure of information technology
networks. Other operational issues include the management of inventory
levels, including work-in-process levels and raw materials acquisition, quality
control, materials handling, and maintenance policies.

Operations management entails studying the use of raw materials and

ensuring that minimal waste occurs. Operations managers use numerous
formulas, such as the economic order quantity formula, to determine when
and how large an inventory order to process and how much inventory to hold
on hand.

What is the purpose of operations management (OM)?

Operations management (OM) is concerned with controlling the production
process and business operations in the most efficient manner possible. OM
professionals attempt to balance operating costs with revenue to maximize
net operating profit.

What is an example of operations management?

Operations management is prevalent in the healthcare sector. The current
healthcare system overuses expensive, technological, and emergency-based
treatment. High costs from care often remain uncompensated due to
uninsured patients. A prevalence of services in expensive settings creates a
burden on taxpayers, health insurance holders, and healthcare institutions.

Nature Of PRODUCTION /OPERATION Management

Production Management is a process which involves managing and

controlling production activities of the business. It involves the application of
management principles to the production function of the business to increase
productivity. Production management applies planning, directing, organising
and controlling for managing production operations. This process is
concerned with the conversion of raw materials into business finished
products efficiently without any wastage of resources.
1.
Results in Value Addition: Production management is a key tool
available with an organization which assist in value addition. It is a
process which enables in producing high-quality products by
purchasing raw materials from the right source, in right form, at right
price and in right quantity. These quality goods provide better
satisfaction to customers thereby improving goodwill of an
organization.
2. Inter-Disciplinary Approach: It is an inter-disciplinary approach which is
derived from several disciplines and subjects. Different subjects like
statistics, mathematics, economics, engineering, sociology and human
psychology have contributed toward the development of production
management approach.
3. Part of General Management: Production management is an essential
component of General management. It is a tool which assist managers
 in planning, organizing, coordinating and controlling all activities
related to the production of products and services.
4. Transformation Process: It is a process of transformation in which raw
materials are converted into finished products that are ready for
consumption by consumers. Production management focuses on
economical production of products avoiding any wastage of raw
materials used.
5. Operative Function: Production management monitors day to day
operations of business for ensuring long-term continuity. It supervises
all production activities on daily basis for checking out whether all
resources are efficiently utilized.
6. Both Art and Science: It can be treated both as an art as well as science.
Production management is termed as art as it is the one which assign,
coordinates and monitors all work activities of an organization.
Whereas, it is a science as it manages all machines and technical
aspects helping in production activities.
7. Management of Service Sector: Production management not only
manages the activities related to production of tangible products. It is a
process which monitors the service sector also where intangible
products are provided to customers as per their needs.
Scope Of Operational Management

1. Facility location: It involves selecting the right location for setting up

production facilities of business that affects its long term growth. This is
an important decision to be taken as it involves long term commitment
and huge investments in land, building and machinery. Location of
facility should be appropriate from where raw materials, labor and other
factors of production are easily accessible by business.
2. Plant layout and Material Handling: Plant layout is concerned with
physical arrangement of facilities set up by business. It involves
deciding departments, work Centre’s, machines and necessary
equipment’s within the facility for ensuring better productivity. Material
handling refers to managing the movement of materials from
storeroom to machinery and from machinery to another stage of
production like packaging and storing.
3. Product Designing: Product designing means giving shapes to ideas
of products for converting them into a reality. Every organization
should come up with innovative products in market after conceiving
new ideas based on market requirements.
4. Designing of Process: Process design is an overall route followed by
business for transforming raw materials into finished products. It is a
crucial decision to be taken as it determines the efficiency of business. It
involves choosing appropriate technology, deciding sequence of
production processes and facilities layout.
5. Production Planning and Control (PPC): It involves planning and
controlling various aspects of production activities. PPC is a process of
deciding production in advance, setting up the exact route for each
item, deciding the start and finish deadline of each product for
directing production orders to shops and following product progress in
accordance with the order.
6. Quality Control: Quality control is a process of checking and
maintaining the required quality standards of production activities
within the organization. It ensures that goods produced are of high
quality by setting up check points and measuring performance from
time to time.
7. Maintaince Management: It refers to evaluation of all business
activities for identifying any deviations if there. Maintaince
management involves taking all corrective steps for removing these
deviations. It focuses on keeping all the processes on track in line with
decided quality, pre-determined cost schedule and time range. Taking
care of all machinery repairs, replacement and servicing are included in
this.
Difference between Production and operational management

Functions of Operation Management

Operations management keeps processes running smoothly within organizations. Think

of your company as an airport. Each team is an airplane taking off in different directions
with their projects and ideas. As an operations manager, you’re the air traffic controller
keeping everyone and everything on track.
An air traffic controller monitors things like weather, flight movement, and pilot
communications. Similarly, there are seven functions of operations management.
 1. Operational planning
Operational planning is the foundational function of operations management. Your
duties within this function may include:
 Monitoring daily production of goods
 Managing and controlling your inventory
 Keeping tabs on team member performance and well being
 Production planning
 The role of operations management is to uphold operational efficiency. Always be on the
lookout for new advancements to remove bottlenecks and improve your operations
strategy.

Skill needed: Resourcefulness

When you’re resourceful, you’ll have an easier time maintaining business processes. As
an operations manager, you’ll have to manage your team and keep the company’s
wellbeing front of mind. To handle these changes, you need to be fast on your feet. In
situations when you don’t have the tools you need at your disposal, it’s critical to think
quickly and use what you have to come up with solutions.

2. Finance
Finance is an essential—and universal—function of operations management because
every company strives to reduce costs and increase profits. As an operations manager,
you’ll ensure company leaders keep the budget in consideration when they make
important decisions. Some of your tasks may include:
 Creating budgets to meet production goals
 Finding investment opportunities
 Allocating budgets and managing resources
You may wonder how the financial duties of the operations team differ from those of the
finance department. The finance department will handle everything from revenue to
salaries. Meanwhile, you should limit your financial participation to things relevant to the
production process.

Skill needed: Financial planning

Financial planning happens when you determine if your business has the budget to
achieve strategic objectives and goals. To push your company leaders toward financial
success, you’ll need to plan ahead.
Keep production costs low by finding high-quality vendors with low prices. You want to
create a top-notch product that stays within your customer’s budget.
 3. Product design
Product designers may be the creatives of the team, but the operations team is the eyes
and ears that gathers information from the market. Once you identify customer needs
and marketing trends, you'll relay what you've learned back to the designers so they can
make a strong product.
Specific tasks your team may handle in this function include:
 Consolidating market research into digestible results
 Communicating results to a product design team
 Offering design direction to help designers devise a product
Without the operations team, the product design team would have trouble knowing what
to create. The market is always changing, and creating a successful finished product
requires extensive research.

Skill needed: Data interpretation

The ability to interpret data is a key skill for this function of operations management. As
the operations manager, you must turn data into understandable directions. Your goal
should be to clearly communicate how you want your product to match or exceed other
products on the market.
Once you have a plan in place, streamline communication across teams by using one
platform or tool. Create a central project plan to track action items, information, and
feedback. Then, share it in a project management tool so everyone can access it and view
changes in real time.

4. Quality control
Quality control goes hand in hand with product design. After the production team
creates a product, the operations team will ensure it meets quality standards. You’ll
need to test the product to guarantee there are no defects before releasing it to the
public. Your tasks for quality control may include:
 Performing risk analysis to identify potential problems
 Inspecting products to make sure they meet quality standards
 Creating tests to control your product quality
 Documenting any defects or deficiencies of products
The level and standards of quality control vary by industry—one of the first things your
team should do during the quality control process is to perform market research to
determine what quality standards should be in your industry. Once you’ve outlined a set
of quality standards, use them as a benchmark for quality management moving forward.

Skill needed: Conflict management

Not every product will be top quality after one round through the production process. It
may take many rounds of design and a few trips back to the drawing board to create a
quality product up to standards.
This type of feedback will ultimately make your product the best version of itself, but it
can be hard to hear in the moment. In order to excel at this function of operation
management, build strong conflict management strategies. That way, you can weather
these times of uncertainty and create products that wow customers.

5. Forecasting
Forecasting isn't just a term for the weather—operations teams also use forecasting to
predict the demand for a product. Your team can master forecasting by trying to answer
hypothetical questions like:
 What will the demand for this product be in the future?
 What marketing and promotions should we plan for this product?
 What sales initiatives should we plan for this product?
 Can we estimate the storage costs we’ll need for inventory?
 Can we determine the cost of sourcing and raw materials?

Skill needed: Data driven decision making

 Data driven decision making will serve you well in many functions of operations
management. The only way to make accurate predictions is to base your predictions on
facts. Start by forecasting product demand by analyzing past trends. Then,
communicate forecast results to department leaders so they can adjust future plans
accordingly.

6. Strategy
Strategy is a broad function of operations management that can involve operational
planning, monitoring, and analysis. The goal of strategic management is to make sure
production decisions align with business goals. Your company’s business objectives may
include:
 Prioritizing customer satisfaction
 Improving the production system
 Controlling costs while maintaining a competitive edge
Your job as operations manager is to find ways to meet the business objectives of your
company. Some strategies you could use for the examples above include:
 Analyzing your inventory: To prioritize customer satisfaction, start by analyzing your inventory.
This can increase customer satisfaction by ensuring you’re always able to meet customer
demand.
 Collaborating among teams: More collaboration among teams will improve the production
system because communication will increase, resulting in less room for error.
 Prioritizing green processes: Switching to more environmentally friendly processes can save
money in the long run and keep customers invested in your brand.

Skill needed: Critical thinking

Critical thinking is important for the strategic function of operations management
because it’s how you create thoughtful ideas and tie them back to fundamental points.
When you logically think through concepts, you’re able to develop strong strategies.
 You can use research and data to support your ideas and then use what you’ve learned
to make well-supported decisions for your team.

7. Supply chain management

If your company produces products or services, your company will need supply chain
management for sourcing, producing, and shipping. You may have a separate
department for the supply chain, but supply chain issues related to internal production
will be yours to handle. The supply chain should flow in a cyclical fashion as follows:
1. Raw materials
2. Supplier
3. Production/manufacturer
4. Distributer
5. Retailer
6. Consumer
The supply chain is cyclical because once you analyze consumer demand, you'll source
more raw materials and go down the chain again.
You don’t necessarily have to follow each of these steps. For example, if you work at a
small company, you may send products or services directly to consumers. This cuts out
distribution and retail costs, but you’ll still need to keep the supply chain intact. If there’s
a bottleneck in one stage of the supply chain, it can wreak havoc on every other stage.

Skill needed: Problem-solving

As an operations manager, you'll need to organize, plan, and delegate. But to take your
skills a step further, you must be a good problem-solver as well. There are
many problem-solving strategies you can study and keep in your toolbox—and your team
members will appreciate your quick solutions when things get tough.
 Organization of Production
Read


Palampur village is a fictional community, and the tale will show how diverse resources
are combined to provide the village’s desired goods and services. Palampur’s major
source of income is agriculture. Dairy, transportation, small-scale manufacturing, and
other industries are also present in the village.
Palampur village has a unique narrative to tell. Palampur is well connected to other
villages and towns and is home to around 450 families from various castes. All of the
tube wells in the fields are powered by the village’s adequate electricity. It has one
dispensary and one basic health center run by the government. Palampur has a well-
developed infrastructure, including roads, public transportation, power, irrigation,
schools, and a health center.
 Organisation of Production

Organization of Production
The primary goal of production is to create goods and services, which necessitates the use
of four main components :
Land
One of the most significant considerations is the land. It is a necessary component of
manufacturing. The term ‘land’ is commonly used to refer to the earth’s surface.
However, in economics, the term has a distinct connotation. The term “land” refers to not
just the earth’s surface but also all other free gifts from nature, such as mineral resources,
forest resources, and anything else that aids in the creation of products and services but is
offered by nature at no cost.
Labour
Another important component of manufacturing is labor. In fact, no matter how valuable
a component is, it is useless unless it is combined with labor. By labor, we mean any
form of human activity, whether physical or mental, that is done for the purpose of
earning money. Labor, unlike land, is an active part of the manufacturing process. In
truth, it is labor, in collaboration with land and wealth, that allows manufacturing to take
place. Without the application of labor, land and capital cannot create anything.
Physical Capital
The factor of production is physical capital. It refers to the many inputs necessary at each
level of the manufacturing process, such as tools, machinery, computers, and other
equipment for the creation of goods and services. It’s utilized in the manufacturing
process to convert raw materials into final items. There are two forms of physical capital:
 Fixed Capital: Fixed capital refers to equipment, machinery, and structures that may
be employed in manufacturing for a long time. Tools and machinery varied from the
most basic, such as a farmer’s plough, to the most advanced, such as generators,
computers, and so on.
 Working Capital: Manufacturing needs a wide range of raw materials. It is vital to
have money in order to make payments and purchase other necessities. .
There can be no manufacturing without bringing these three production variables together
and applying them in the proper proportions. As a result, someone must hire them from
their owners in exchange for rent, salaries, and interest, as well as determine the
proportions of each required for production. This is referred to as a business. The services
of an entrepreneur, who oversees, organizes, and assumes all risks, are referred to as
enterprise.
Farming in Palampur
The farming activities of Palampur includes:
The land is fixed
Village farming is the major source of income for the inhabitants of Palampur, and their
well-being is linked to farm output. However, there remains a fundamental restriction in
increasing agricultural productivity. The amount of land that is cultivated is basically
fixed.
Cultivation of more plants in the same land
Kharif farmers plant jowar and bajra during the rainy season, followed by potato
production between October and December. Farmers produce wheat in the winter, while
a portion of the land is dedicated to sugarcane, which is collected once a year. Farmers
can cultivate three distinct crops thanks to well-developed irrigation. The irrigation
system was converted by electricity. Many cropping refers to the cultivation of multiple
crops on a single plot of land. Modern farming is another approach to increase
production. The Green Revolution exposed the Indian farmer to wheat and rice
production utilizing high-yielding varieties (HYVs) of seeds in the late 1960s.
Support to the land
The natural resource base has been abused by modern farming practices. The soil lost its
fertility as a result of increased usage of chemical fertilizers. Natural resources such as
soil fertility and groundwater are depleted, and restoring them is extremely challenging.
Land distributed among Palampur’s farmers
Any type of farming necessitates the use of land. About a third of the 450 households in
Palampur are landless. Dalits do not have access to agricultural land. 240 households
farm tiny parcels of land measuring less than 2 hectares. There are 60 medium and big
farmers in Palampur who cultivate more than 2 hectares of land.
Labor Providence
Small farmers tend to their own plots of land. Medium and big farmers use labourers to
cultivate their fields, who are either landless or have limited pieces of land to cultivate.
Farm labourers will have no control over the crops cultivated on the property. They will
be paid for their job in the form of wages, which can be cash or in-kind, such as crops.
Meals are occasionally provided to labourers. Wages differ from one location to the next,
from one crop to the next, and from one agricultural activity to the next. Agricultural
labourers may be hired on a daily basis, for a specific farm activity such as harvesting, or
for the entire year.
Capital in farming
Modern agricultural practices need a significant amount of capital :
 The majority of small farmers borrow money from larger farmers, local
moneylenders, or dealers who offer various agricultural inputs.
 Large and medium-sized farmers have their farming savings. As a result, they are able
to get the necessary funds.
Farm Product Surplus Sales
The farmers keep a portion of the wheat they grow on their property for their food and
sell the rest. Wheat is only supplied to the market by medium and big farmers.

FUNCTION OF PRODUCTION MANAGEMENT

 Product and Design Selection: The proper product is first chosen for
manufacture by production management. The appropriate design for the product
is then chosen. Because the company's survival and profitability depend on the
product and design chosen, care must be taken. The proper design must be
chosen once the right product has been chosen. The design must adhere to the
specifications provided by the client.
 Production Process Selection: The proper production procedure must be
chosen by production management. Production management makes it simple to
adopt various technology, equipment, a material handling system, etc for better
results in business.
  Production Capacity Selection: To match the demand for the product,
production management must choose the appropriate production capacity. This
is so that difficulties won't be caused by excess or a lack of capacity.
 Planning The Production: Routing, which refers to determining the flow of work
and the order of operations, and scheduling, which refers to deciding when to
begin and when to finish a certain production activity, are both included in
production planning.
 Production Control: Production management helps the organisation select the
right product and also monitoring and controlling production.
 Cost and quality control: this includes ensuring standards of quality and
maintaining costs.
 Inventory Control: This is another important phase of production management.
This means not overstocking or understocking but maintaining the right levels of
inventory.

What is productivity?
The Bureau of labor Statistics defines productivity as “a measure of
economic performance that compares the amount of goods and services
produced (output) with the amount of inputs used to produce those goods
and services.”

When people think of "being productive," they often think about what
they’re personally getting done. For many people, that means checking
things off the "to-do" list. That type of personal productivity reflects how
efficient you are at completing tasks. But not all tasks are created equal.

How does productivity work?

Most of us understand how personal productivity makes our lives better,
but what about corporate or national productivity?

When you’re productive, it takes less time, effort, and mental demand to
achieve what you want or create a high-quality finished product.

When the output is the same (achieving what you want), but it takes less
input to accomplish it (time, effort, and resources), you are more
productive.
It’s the same for businesses.

When businesses produce a larger amount of a given output (goods and

services) with less input (labor, capital, and materials), they’re more
productive.

Of course, in today’s business, the output for our efforts can be harder to
quantify. (That's why so many people default to a checklist — "done" or
"not done" is easy to measure, even if it has no connection to value.) It is
hard for individuals or businesses to compare output as value is less and
less often delivered as a standard unit of product. However, at the
business level, in aggregate, you can compare the level of effort, time, and
resources used to produce an equivalent output of sales or revenue.

Businesses measure productivity by taking total revenue (or net sales) in a

particular period (the output) and dividing that by the total number of
employee labor hours worked in the same period (the input). This is called
the labor productivity formula.

Traditionally, higher workforce productivity meant employees are working

more efficiently and creating more goods in less time. This leads to
increased profits since companies are spending less on employee payroll
expenses to generate a number of units of goods or an amount of sales
revenue.
Meanwhile, low productivity or partial productivity can indicate issues in the
processes used to produce the goods or generate and fulfill the sales.

Even when employee engagement is high, if the production process slows

due to a lack of materials or capital, productivity levels will drop. This is
because labor cost (or workforce productivity) is only one input that goes
into the labor productivity formula.

Governments measure multiple productivity factors to understand the

overall economic productivity and recognize productivity trends.

For example, one 2020 productivity trend was working from home, and the
economic data shows that GDP could increase if employees continued to
work remotely 1-2X a week.

While one productive person makes a difference, national GDP and

corporate productivity rely on extensive employee engagement to deliver
results.

Types of Productivity

Although productivity is a term used for the overall efficiency levels of a company, there
are different types they can focus on.

Labor Productivity

Labor productivity is the measure of how much financial yield a company has been able
to generate for every work hour. It is also the efficiency with which labor has
transformed the input into a product that has a much higher perceived value. For
instance, in software companies, it would be a measure of how efficiently a firm is using
its resources to write the necessary code and implement it.

When companies endeavor to improve labor productivity, they can do so with innovation
in how things are done, investment in physical capital and improving human capital.
When a company measures its labor productivity, it is also trying to figure if the
measures implemented for these three areas have been effective.

Capital Productivity
Capital productivity is used to determine the efficiency of fixed assets. It is a measure of
the amount of output to the amount of physical capital used as input.

Capital productivity is measured using parity valuation of the fixed assets used, either
by the output generated through the year or the final output at the end of the year.
Profitability is inversely related to the ratio of capital and output.

Material Productivity

Material productivity is a measure of the output generated to the amount of input

materials used. Of course, when it comes to software companies. In such cases, it
would be measured for the number of resources taken to develop a software or
complete a project.

All companies need to know if their utilization levels are on par with industry levels, at
the very least. If they can improve their utilization level well above the base minimum of
the industry levels, then they have truly stepped up to the competition.

Top Factors Affecting Productivity in a Workplace

As a team lead, have you ever wondered why some teams are more
productive than others? Why are teams with 100 people successful while
some teams fail even with 10?

Is it because they have better personnel on their team or they are

working harder?

Nah!

That cannot be the only reason.

There’s more to team productivity than we think.

Let’s unlock the secret code to productivity and find the strategies that
can take your team productivity to the next level.

8 factors affecting productivity

Team productivity depends on a lot of different factors from having the

right kind of leader to making use of the right kind of tools. Let’s explore
all these factors.

1. Communication

In a recent report by Grammarly, The State of Business Communication,

it was found that teams lose an equivalent of an entire workday each
week due to poor communication.

Is that it?

No!
When we turn that into costs, it amounts to a staggering $12,506 per
employee every year.

Think about the time and money you can save by just getting your
communication right.

Here are some simple yet effective tips to do just that:

 Have everything properly documented: Where will your

teammate find the marketing report of clients? Where can he
access the client's contact details? Which tasks does he need to
perform today? Your employee should be able to see all of this
from wherever he’s working.
 Pay attention to your written communication: If your team is
working remotely, most of the communication is written. This
means your team doesn’t have facial expressions, tone, or body
language to contemplate better. This can lead to unnecessary
misunderstandings. For example, someone sent in an email saying,
“We published four blogs this month.” Is it a bad thing or a good
thing? You have no way to know. Thus, always pause before
replying and re-read your messages for the right tone and impact
before you hit the “Send” button.
 Always over communicate: Sharing too much is less harmful than
sharing less or irrelevant information to a task. Always explain the
tasks in detail to help your teammate deliver tasks exactly the way
you want.
 Ensure accountability: Let’s suppose your project got delayed by
5 days. If you are not able to pinpoint the reason for it, there’s no
accountability. Who said what? At when? Which task got delayed?
Why? These are things you should be able to track.
Pro Tip💡: Have everything documented and accounted for, always re-
read your written communication and over communicate. Do these
things and you’re all set to have productive two-way communication.

2. Time management

If you’re seeing too many delays happening in your projects, one reason
might be that the team is not performing well. Another more probable
reason could be that your team is spending so much time on non-value
activities that they are not getting enough time to work on the important
tasks.
Your focus should be on eliminating or curtailing the time required for
non-value activities such as unnecessary meetings, manual tasks that
could be automated, admin tasks, and so on.

Consider these two statistics:

 An employee spends an average of 3.1 hours checking the work

email.
 An average worker is only productive for 2 hours and 53 minutes.

What if your teammates are spending the most productive hours

checking emails? Or attending unnecessary meetings?

Scary, isn’t it?

This calls for better time management.

Pro Tip 💡: Improve time management by tracking down those non-value

adding tasks. Cut back on them, automate tasks or simply ask your team
to find creative ways to deal with these activities.

3. Technology

Have you ever had a teammate say, “I couldn’t analyze this report
because I didn’t have the report as Sarah was on leave?” or “Working on
new projects takes time as I have to start everything from scratch?”

If yes, this is a sure-shot sign that your team is not getting the tools to
help streamline their work and get things done more efficiently.
Here are tools every team must have:

 Project management tool: Every team handles projects, big or

small. You can make use of a PM tool such as SmartTask to stay
updated on multiple projects, assign tasks, comment on them, and
collaborate.
 Cloud storage: You can make use of tools such as Google Drive to
store all your files in one place.
 Communication: Emails are not meant for everyday
communication. Task management tools with in-built chat can help
you communicate..
 Brainstorming: You can either opt for video conferencing tools
such as Skype or resort to tools specifically built for ideation such
as Mindmeister.

Pro Tip💡: Give your team access to tools that improve collaboration and
team productivity.

4. Leadership

What do you think of when you hear the word “Nike”?

Their slogan — Just do it, right?

In the book Shoe Dog: A Memoir by the Creator of Nike, Phil Knight
brings forward an interesting story.

In his words, “I’d been unable to sell encyclopedias, and I’d despised it to
boot. I’d been slightly better at selling mutual funds, but I’d felt dead
inside. So why was selling shoes so different? Because, I realized, I wasn’t
selling. I believed in running. I believed that if people got out and ran a few
miles every day, the world would be a better place, and I believed these
shoes were better to run in. People, sensing my belief, wanted some of my
belief for themselves. Belief, I decided. Belief is irresistible.”

There’s a lot to leadership. One important part of it is to make people

believe in themselves, that they can work on even the most challenging
of tasks. Phil Knight was brilliant at that. But there’s a whole lot where
that comes from.

So much that we can write an entire book on it.

Worry not! We won’t make you read one, at least not right away.

Here are all the important things a leader must do in just a few bullet
points:

 Keep a track of workload: You might not even know when your
A-star employee is on the verge of burn-out. A great leader not
only knows his/her teammate’s strengths and weaknesses but
he/she also makes sure work is allotted in such a manner that no
teammate is overworked or underworked.

 Lead by example: When you arrive in every meeting 10 minutes

late, you’re unknowingly creating an environment where
punctuality is not considered important. Want your teammates to
work with focus on important tasks? Or to be right on time? One
simple way: show them how.

 Create an atmosphere of gratitude: Employee engagement,

performance, and productivity is 14% higher in organizations with
recognition programs. As a leader, all you need to do is
acknowledge your team member’s accomplishments, either
personally or publicly. You can even go one step ahead to find out
 how that teammate would like to be recognized.

 Create a safe environment: What would you like more: your

teammate hiding a mistake that would cost you a lot at the end or
him coming up to you and owning that he made a mistake? To
have the latter one happen, you need to be authentic and create a
safe environment for your team.

How to improve manufacturing

productivity: 5 effective strategies

The best way to improve manufacturing productivity is to take a holistic

approach. That means considering not only the manufacturing process
itself, but also the people, technologies, and production costs that
contribute to a productive manufacturing environment.

We’ll dive into these in more detail shortly. But first, here’s a quick
breakdown of the top five ways to improve productivity in
your manufacturing operations.

1. Increase employee productivity

Improving the productivity of your employees directly lifts the performance
of your business. One way to think about this is to consider how your staff
can be more productive in the tasks they’re given.

Once, that simply meant forcing people to work faster. But this approach
isn’t sustainable.

A more modern strategy is to find healthy ways of motivating your

employees to excel at their jobs.

Another approach is to step back and ask which tasks your people can add
the most value to.

That doesn’t mean replacing workers with machines, but rather looking for
ways you can automate non-value-adding tasks, like data-entry
or counting stock, so that your staff are freed up for more value-adding
work.

2. Improve manufacturing productivity by reducing waste

In a manufacturing business, waste strains profitability.

Manufacturing waste can come in the form of time, resources, and labour.
It shows up through insufficient process planning, inventory imbalance, or
poor warehouse layout.

Essentially, waste is any expense or effort that does not efficiently

transform raw materials into a finished product. By streamlining your
production processes and eliminating wasteful expenditure, you can add
new value to each phase of production.
3. Establish more efficient manufacturing operations
Operational efficiency is about delivering good-quality products to the right
customers in the most cost-effective and timely manner. As a result, it
directly contributes to manufacturing productivity.

There are four factors that contribute to operational efficiency:

 Resource utilisation
 Production efficiency
 Distribution methods
 Inventory management

By focusing your efforts on each of these key areas, you can begin to
establish optimised workflows that contribute to greater business
performance and higher output – the cornerstones of ideal manufacturing
productivity.

4. Optimise your supply chain

Not all manufacturing productivity gains are achieved internally; sometimes
you need outside help.

Supply chain management is an often-ignored strategy for improving

manufacturing productivity.
But if you manage your supply chain well, you can get the best rates and
products in the shortest possible time. In turn, this reduces your total
inventory costs and improves your production efficiency.

Additional benefits of effective supply chain management also include

healthier supplier relationships and better supply chain visibility, ultimately
facilitating smarter and more cost-effective production planning.

5. Minimise production costs

Another way to improve manufacturing productivity is to reduce your total
production costs.

Production costs are the costs incurred in manufacturing a product or

providing a service. These can include expenses such as raw materials,
labour, suppliers, and general overhead – as well as any government taxes
and royalties.

Improved profitability is the obvious benefit of fewer production costs. But

reducing these costs also frees up capital that can then be invested in
efficiency-boosting resources, such as more effective tools, more staff, or
better manufacturing software.

Now that we’ve covered the basics, let’s dive into some actionable
strategies for improving manufacturing productivity.

#1 Increase manufacturing output

by improving employee
productivity
Play Video

Employee productivity is a metric used to compare output against the

amount of time it takes to produce. Essentially, it’s a measure of how
efficiently employees operate: for each hour spent working, how many
goods do they produce?
As a formula, employee productivity in manufacturing can be measured
thusly:

“(Total Output / Total Labour Hours Worked) / Number of Employees = Individual Employee
Productivity”
A great leader can help improve the team’s productivity by managing
workload efficiently, leading by example, recognizing teammates, and
being authentic and vulnerable.

5. Calendar transparency

Do you love to shower your team with surprise meetings? Or have you
ever had a meeting where half of the team seemed zoned out?

One way to solve this problem is by having some level of calendar

transparency. You can do this by taking your team’s calendar in
consideration while scheduling meetings or ask them the same on a
group chat.

This step becomes even more important when you’re working remotely
and you have teammates that work in different time zones.

Pro Tip💡: Decide on the availability of each team member and the ideal
time for meetings and “Deep work” periods.

6. Training
Your team will be motivated and productive when they’re constantly
learning new things and getting the skills to stay abreast in their careers.
There are many cost-effective ways in which you can deploy training:

 Have peer-based learning: Everyone in your team is great at

something. If Person X is great at analytics in your team, have them
act as a coach to anyone who wants help in that area or has
questions regarding the same.
 Set time aside for upskilling: Give your teammates a few hours
every week to upskill themselves. You can even create a library for
training resources for every field.
 Create modules: A new joinee on the team may not know the
nitty-gritties of how you work. Create templates and modules in a
project management tool so that you don’t need to explain the
same things to every member that joins the team.

Pro Tip💡: Keep your teammates engaged with challenging projects,

constant upskilling opportunities and readymade modules and
templates.
Get Free access to readymade onboarding templates.
Try SmartTask for Free

7. Conflict Management

Most of us have been privy to a workplace conflict at least once in our

lives. When you consider that everyone in a team comes from diverse
places, with different perspectives and belief sets, there are bound to be
disagreements.

The goal is not to completely eliminate these disagreements. If everyone

agreed with each other on the team, there would be no growth and a
dearth of creative ideas as well. Instead, your goal should be to manage
these conflicts smartly.

How?

By not jumping to conclusions, taking the time to listen to both ends,

asking questions, and then getting both the sides on the same page.

Pro Tip💡: SmartTask is one platform that has all your conversations and
task comments in one place. With such accountability, you can curtail the
amount of conflicts that arise due to misinterpretation and
miscommunication.

8. Team bonding

Liberty and freedom were at their best when work from home, or
perhaps anywhere, became a norm during the Pandemic outbreak. On
the flip side, the lack of human connection made a lot of people feel
isolated which led to a subsequent drop in productivity.

Whether your teams are working from the office or remote, getting your
team connected is a sure-shot way to increase productivity. And this can
only be done by organizing team bonding activities once a week, where
everyone can interact with each other in a casual, fun setting.

Case Study: How SmartTask helped Sarhad Dairy increase its productivity
by a whopping 50%?

Sarhad Dairy was established way back in 2009. When you consider the
amount of work they do daily — collecting 500,000 liters of milk every
day from 680 members, you realize that it’s not easy to make processes
efficient throughout the organization.

But with SmartTask, they were able to do so.

Let’s delve into the problems they faced and how the tool came to their
rescue.

Problem 1: Communication problems

With almost 30-40% of their staff working on-field, keeping track of work
activities through pen and paper brought forth a lot of errors. So, they
switched to digital communication. That posed another problem.
Everything was scattered in Whatsapp, email, and in-person
conversations. No tracking could be done.

Solution: SmartTask helped them have one platform to manage all their
communication. Tracking could be easily done without any loss of
accountability.

Problem 2: Managing the number of service requests

Their phone operators used to get a lot of calls from end-users for
services like account-related queries, veterinary services or general
information. Diverting these phone calls meant going through a lot of
internal hoops. The workload management was ineffective, to say the
least.
Solution: We helped them with a customizable IVR solution for the end
user to place a call and log a complaint, with all these details getting
stored in the tool and always available for review. The managers could
also see the workload of each team member through a simple chart in
SmartTask.

All of these solutions and the other functionalities of SmartTask helped

Sarhad Dairy not only increase its productivity but even reduce costs by
20%.

Want to see results like these for your organization as well? Join the
growing list of companies associated with us. Hop on a call with us
today.
Join the growing list of companies associated with us. Hop on a call with us today.

Book a meeting

Watch demo

Chat with us

Frequently Asked Questions

1. What are external factors affecting workplace productivity?

There are several external factors that can affect productivity in the
workplace. Here are some common ones:
1. Physical Work Environment: The physical conditions of the
workplace, such as lighting, temperature, noise levels, and overall
layout, can significantly impact productivity. A comfortable and
well-designed workspace can promote focus and efficiency, while a
noisy or uncomfortable environment may lead to distractions and
reduced productivity.
2. Commute and Transportation: The time and effort required for
employees to commute to work can impact their overall
productivity. Long commutes, traffic congestion, and unreliable
public transportation systems can lead to fatigue and decreased
focus once employees arrive at the workplace.
3. Economic Factors: Economic conditions, both globally and within
specific industries, can affect productivity. Factors such as market
demand, financial stability, and industry trends can influence an
organization's resources, goals, and overall productivity levels.
4. Government Regulations: Government policies, regulations, and
compliance requirements can impact productivity, particularly in
highly regulated industries. Organizations may need to allocate
additional resources and time to ensure compliance, which can
affect overall productivity levels.
5. Social and Political Factors: Social and political factors, such as
changes in government policies, public opinion, or cultural norms,
can have indirect effects on productivity. For example, shifts in
societal attitudes towards work-life balance or diversity and
inclusion may influence workplace dynamics and employee
motivation.
6. Health and Well-being: Employee health and well-being are
crucial factors in productivity. Factors such as access to healthcare,
wellness programs, and work-life balance initiatives can impact
employees' physical and mental well-being, which, in turn, can
affect their productivity levels.
It's important to note that the impact of these external factors can vary
depending on the industry, type of work, and individual employee
characteristics. Organizations should strive to identify and address these
factors to create a conducive environment that supports productivity and
overall employee satisfaction.

Standardized Servive /Customized service/Assemble to order Stratergy